Tiffany vs Costco

Posted on Saturday, September 12th, 2015 at 6:15 pm by Diamond Jim

“In a week of big stories, the outcome of Tiffany v. Costco was certainly the biggest, as a federal court in New York handed down a decision that answered the question: Has the term “Tiffany” become genericized, making it OK for anybody who’s selling a certain style of ring to refer to it as a “Tiffany setting?” Tiffany & Co. first filed suit against Costco Wholesale Corp. on Valentine’s Day 2013, accusing the membership-only warehouse club of selling rings with signs designating them as “Tiffany” when they were not, in fact, rings made by Tiffany & Co. According to Tiffany, Costco even went so far as remove the Tiffany descriptor when it advertised these same rings online so as to avoid detection. Shortly thereafter, Costco fired back with a counterclaim insisting that the term “Tiffany” had become genericized and that the phrase “Tiffany setting” could be used to describe any engagement ring of a certain style. Now, when most people think of generic, what comes to mind is non-brand-name products, like those black-and-white bags of potato chips my mom used to buy in Foodland because they were cheaper than Ruffles. I always wanted to experience the thrill of eating those ridged potato chips in my own home but, alas, it was not meant to be. As it relates to trademarks, however, what generic means more specifically is a trademark or brand name that has become synonymous with a more general class of product or service. This can happen organically—laundromat was once a trademarked term but its trademark expired—or against the wishes of the company or brand. Aspirin, for example, actually was trademarked by Bayer but deemed in court many years ago to have become genericized in the United States. The same is true for Murphy bed, the name for a type of bed that folds up into the wall in order to save space, and originally was the concept of William Lawrence Murphy. In filing its lawsuit, Costco asserted that the Tiffany name had gone the way of aspirin or the Murphy bed and therefore all retailers could use the term “Tiffany setting” to describe any ring with multiple slender prongs extending upward from a base to hold a single gemstone. (The actual Tiffany Setting, which was created by Charles Lewis Tiffany in 1868, has six prongs.) The judge disagreed, ruling that the term Tiffany has not become generic and, thereby, is still protected by trademark. The JVC’s Cecilia Gardner, who actually was deposed in this case because of her knowledge of both the law and the jewelry industry, says what this means for the jewelry industry is simple. Retailers, manufacturers, etc. should not use the term “Tiffany setting” unless they are selling a ring manufactured by Tiffany & Co. “This decision is authoritative that that phrase is an infringement on Tiffany’s intellectual property and cannot be used without real risk,” she said. “Everybody is exposed to liability if they use that term to connote something else other than a ring manufactured by Tiffany.” Tiffany definitely is a company that takes protecting its 178-year-old name very seriously. It’s what companies have to do in order to prevent their brand or brands from becoming genericized. Gardner told me that Xerox prominently and regularly publishes notices pointing out that Xerox is the name of a company, not the name for any photocopied pieces of paper or the action of copying them. Kimberly-Clark does the same thing in order to remind people that Kleenex is a trademarked brand, not a generic term for facial tissue. “Tiffany (in this case) needed to do the same to protect its intellectual property and to prevent the term (Tiffany from) gathering or acquiring a secondary meaning,” she says."

National Jeweler / Michelle Graff / September 11, 2015



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